Bond Yields Compress on Demand from upcoming Bond Maturity


Friday, May 25, 2018 / 07:12 PM / Zedcrest Capital

***Oil prices slump as OPEC and Russia consider output boost***

Proshare Nigeria Pvt. Ltd.



The Bond market traded on a bullish note following significant demand from local clients especially on the medium tenured bonds (2027s & 2028s)in lieu of the upcoming bond maturity (N300bn of the 10.7% 30-May-2018). We witnessed the most demand on the 2028s, which traded as low as 20bps away from auction levels closing (13.40/30).  Yields consequently compressed by c.12bps across the curve. We expect a slight continuation of demand opening next week, but on a much softer note, with support seen at 13.30%.


Proshare Nigeria Pvt. Ltd.

Treasury Bills

The T-bills Market traded on a relatively flat note as the CBN mopped up liquidity via OMO and retail FX interventions in the interbank market. Yields consequently rose by c.6bps on average. We expect yields to trend slightly lower opening next week as system liquidity is expected to improve following inflows from FAAC payments into the system today.



 Proshare Nigeria Pvt. Ltd.

Money Market

The OBB and OVN rates shot significantly higher to 17.17% and 19.67% respectively. This came on the back of the OMO and retail FX interventions by the CBN which mopped up most of the liquidity in the system. We expect rates to trend lower on Monday due to inflows from FAAC payment today. This is however barring a further OMO intervention sale by the CBN.


 Proshare Nigeria Pvt. Ltd.

FX Market

The Interbank rate remained stable at its previous rate of N305.90/$. The NAFEX closing Rate appreciated slightly by 0.06% to N361.57/$. Rates in the Cash and Transfer Market however depreciated further by N1.50k to N365.00/$ and N368.00/$ respectively.


 Proshare Nigeria Pvt. Ltd.



The NGERIA Sovereigns remained bullish with yields compressing by c.3bps on average. We witnessed the most demand on the 2030s and 2032s which gained +0.45pt and +0.55pt respectively.


The NGERIA Corps remained slightly bullish, with the most demand seen on the FBNNL 20s which gained +0.55pt. Investors were also slightly bullish on the longer dated tickers with the Zenith, UBANL and FIDBAN 22s posting marginal gains.

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.


 Related News

1.       Funding Rates Crash to Single Digits as OMO Inflows Bolster System Liquidity

2.       Summary of May 2018 FGN Bond Auction

3.       Weak Auction Results Dampen Bond Market Outlook

4.       Bond Market Reverses Prior Session Loss ahead of Auction

5.       Bond Yields Tick Higher as GDP Growth slows in Q1 2018

6.       Offshore Sellers Move Bond Yields higher ahead of CBN MPC Meeting

7.       Market Players Under-subscribe CBN OMO due to System Liquidity Strain

8.       Interbank FX rate rises amid Slowdown in Reserve Accretion

9.       Funding Rates Crash Below 20% as CBN SLF hits 6-Month high at N239bn

10.   Invest in FGN Monthly Bond Auction – May 2018

11.   Funding Rates Spike to 1-yr High as CBN Further Tightens Liquidity with FX Sale

12.   Funding Rates Spike to 7-Month High as Banks Fund for their Retail FX Bids

13.   Funding Rates Spike as CBN Mops up System Liquidity with c.N454bn OMO Sale

14.   Buhari Requests Senate Approval on Promissory Note and Bond Issuance to Settle Inherited Local Debts

15.   NAFEX Rate hits 4-Month High amid Offshore Selloff


Related News